INREV Sustainability Guidelines: Integrating ESG and sustainability in non-listed real estate investment

Overview

The INREV Sustainability Guidelines form part of the broader INREV Guidelines, an integrated framework covering governance, reporting, valuation, and other aspects of non-listed real estate investment. They were developed to address the growing importance of ESG factors in real estate investment and to embed sustainability considerations into standard business practices. The guidelines provide a structured approach for investment managers and governing bodies to incorporate ESG objectives alongside financial goals at both portfolio and asset levels. Rather than prescribing fixed rules, the guidelines are principles-based and flexible. They are intended to be tailored to the specific characteristics of each investment vehicle, with adoption levels agreed between managers and investors.

Methodology and reporting framework

The INREV Sustainability Guidelines emphasizes structured, investor-focused ESG reporting, integrated into regular financial reporting cycles. Investment managers are expected to disclose ESG information to investors in a clear, consistent, and decision-useful format, typically within annual and interim reports or as a standalone sustainability report. The guidelines distinguish between:

• Required disclosures: A baseline set of ESG information to be included in annual reports, covering key metrics such as energy consumption, greenhouse gas emissions, and other material indicators.

• Recommended disclosures: A broader set of optional metrics that provide more granular insight into ESG performance, enhancing transparency where adopted.

Quantitative reporting is central to the framework. ESG data is expected to be reported using standardised key performance indicators (KPIs), typically aligned with INREV’s Standard Data Delivery Sheet (SDDS), enabling comparability across vehicles and reporting periods.

In addition, managers must:

• Provide asset-level and portfolio-level ESG data, supported by appropriate data collection systems

• Report progress against targets, linking performance to previously disclosed objectives

• Disclose the results of an annual self-assessment of ESG implementation and guideline adoption to investors

The guidelines do not prescribe a fixed reporting format, allowing flexibility in presentation, but require that disclosures remain transparent, consistent over time, and aligned with investor expectations.

Current status

The INREV Sustainability Guidelines, last updated in 2023, are widely used within the European non-listed real estate sector as part of INREV’s broader professional standards framework. They have evolved over time, with ESG considerations increasingly integrated across multiple INREV modules, including reporting and valuation. The guidelines are commonly used alongside other frameworks such as GRESB and regulatory disclosures, contributing to greater standardisation of ESG reporting in real estate investment.

Resources

• https://www.inrev.org/standards/sustainability

• https://www.inrev.org/guidelines/module/reporting#inrev-guidelines

• https://www.inrev.org/media/7752

• https://www.inrev.org/guidelines/assessments/sustainability-reporting